================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
0-15507
-------
Commission file number
IMMUCELL CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 01-0382980
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
56 Evergreen Drive
Portland, ME 04103
------------------
(Address of principal executive office and zip code)
(207) 878-2770
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Class of Securities: Outstanding at August 9, 2000:
-------------------- ------------------------------
Common Stock, par value $.10 per share 2,665,184
================================================================================
<PAGE>
IMMUCELL CORPORATION
INDEX TO FORM 10-Q
June 30, 2000
PART I: FINANCIAL INFORMATION Page
----
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
Consolidated Balance Sheets at
June 30, 2000 and December 31, 1999 3-4
Consolidated Statements of Operations for the
three and six month periods ended June 30, 2000 and 1999 5
Consolidated Statement of Stockholders' Equity for the
six month period ended June 30, 2000 6
Consolidated Statements of Cash Flows for the
six month periods ended June 30, 2000 and 1999 7
Notes to Unaudited Consolidated Financial Statements 8-10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 11-12
PART II: OTHER INFORMATION
Items 1 through 6 13
Signatures 14
-2-
<PAGE>
IMMUCELL CORPORATION
PART 1. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
ASSETS
------
June 30, December 31,
2000 1999
------------ ------------
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $1,785,153 $1,823,688
Accounts receivable, net of
allowance for doubtful accounts
of $39,000 and $41,000 at
June 30, 2000 and December 31,
1999, respectively 823,756 453,139
Inventories 569,610 520,656
Prepaid expenses 69,092 27,826
----------- -----------
Total current assets 3,247,611 2,825,309
PROPERTY, PLANT AND
EQUIPMENT, at cost:
Laboratory and manufacturing
equipment 1,002,873 961,554
Building and improvements 595,897 586,242
Office furniture and equipment 65,723 63,418
Land 50,000 50,000
----------- -----------
1,714,493 1,661,214
Less - accumulated depreciation 933,644 881,384
----------- -----------
Net property, plant and
equipment 780,849 779,830
Product rights, net 237,500 250,000
OTHER ASSETS 840 840
----------- -----------
TOTAL ASSETS $4,266,800 $3,855,979
=========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-3-
<PAGE>
IMMUCELL CORPORATION
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
June 30, December 31,
2000 1999
------------ ------------
(unaudited)
CURRENT LIABILITIES:
Accounts payable $ 164,457 $ 322,241
Accrued expenses 232,922 264,991
Current portion of long term debt 19,617 18,691
----------- -----------
Total current liabilities 416,996 605,923
LONG TERM DEBT:
Mortgage loan 424,587 434,658
----------- -----------
Total long term debt 424,587 434,658
STOCKHOLDERS' EQUITY:
Common stock, Par value--$.10 per share
Authorized--8,000,000 shares
Issued--3,054,782 and 2,834,682
shares at June 30, 2000 and
December 31, 1999 305,478 283,468
Capital in excess of par value 8,650,608 8,354,246
Accumulated deficit (4,944,134) (5,235,581)
Treasury stock, at cost --
389,598 shares (586,735) (586,735)
----------- -----------
Total stockholders' equity 3,425,217 2,815,398
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,266,800 $3,855,979
=========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-4-
<PAGE>
IMMUCELL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE><CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Product sales $ 1,427,952 $ 988,860 $ 2,860,856 $ 2,355,583
Grant income 21,157 54,269 32,067 91,145
Royalty income 9,776 -- 12,982 --
----------- ----------- ----------- -----------
Total revenues 1,458,885 1,043,129 2,905,905 2,446,728
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Product costs 726,559 467,037 1,404,112 1,052,093
Research and development
expenses 320,917 184,983 482,309 417,792
Sales and marketing
expenses 229,866 196,379 504,396 425,140
General and administrative
expenses 131,850 103,249 251,836 209,066
----------- ----------- ----------- -----------
Total costs and expenses 1,409,192 951,648 2,642,653 2,104,091
----------- ----------- ----------- -----------
Operating income 49,693 91,481 263,252 342,637
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Equity in earnings of
joint venture -- (19,130) -- (19,130)
Interest and other income 24,317 16,591 47,438 29,276
Interest expense (9,577) (9,959) (19,243) (19,901)
----------- ----------- ----------- -----------
Net other income (expense) 14,740 (12,498) 28,195 (9,755)
----------- ----------- ----------- -----------
NET PROFIT $ 64,433 $ 78,983 $ 291,447 $ 332,882
=========== =========== =========== ===========
NET PROFIT PER
COMMON SHARE:
Basic $ 0.02 $ 0.03 $ 0.11 $ 0.14
Diluted $ 0.02 $ 0.03 $ 0.10 $ 0.13
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 2,652,277 2,428,884 2,598,528 2,428,884
Diluted 2,856,358 2,479,075 2,872,568 2,479,075
=========== =========== =========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-5-
<PAGE>
IMMUCELL CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2000
(UNAUDITED)
<TABLE><CAPTION>
Common Stock
$.10 Par Value Capital in Treasury Stock Total
---------------------- Excess of Accumulated ----------------------- Stockholders'
Shares Amount Par Value Deficit Shares Amount Equity
------ ------ --------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1999 2,834,682 $283,468 $8,354,246 $(5,235,581) 389,598 $(586,735) $2,815,398
Net Profit -- -- -- 291,447 -- -- 291,447
Exercise of
Stock Options 220,100 22,010 296,362 -- -- -- 318,372
-----------------------------------------------------------------------------------------------
BALANCE,
June 30, 2000 3,054,782 $305,478 $8,650,608 $(4,944,134) 389,598 $(586,735) $3,425,217
===============================================================================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-6-
<PAGE>
IMMUCELL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
Six Months Ended
June 30,
---------------------
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net profit $ 291,447 $ 332,882
Adjustments to reconcile net
profit to net cash provided
by operating activities-
Depreciation and amortization 64,760 54,039
Equity share in joint venture loss -- 19,130
Changes in:
Accounts receivable (370,617) (122,056)
Inventories (48,954) 60,803
Prepaid expenses (41,266) (23,842)
Accounts payable (157,784) 23,903
Accrued expenses (32,069) (100,486)
----------- -----------
Net cash (used for) provided by
operating activities (294,483) 244,373
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant
and equipment, net (53,279) (13,721)
Investment in joint
venture -- (13,023)
----------- -----------
Net cash used for
investing activities (53,279) (26,744)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of debt obligations (9,145) (8,499)
Proceeds from exercise of stock options 318,372 --
----------- -----------
Net cash provided by (used for)
financing activities 309,227 (8,499)
----------- -----------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (38,535) 209,130
BEGINNING CASH AND CASH EQUIVALENTS 1,823,688 1,538,905
----------- -----------
ENDING CASH AND CASH EQUIVALENTS $ 1,785,153 $ 1,748,035
=========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-7-
<PAGE>
IMMUCELL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
---------------------
The accompanying financial statements have been prepared by ImmuCell
Corporation (the "Company") without audit, and reflect the adjustments, all of
which are of a normal recurring nature, that are, in the opinion of management,
necessary for a fair statement of the results for the interim periods presented.
Certain information and footnote disclosures normally included in the annual
financial statements which are prepared in accordance with generally accepted
accounting principles have been condensed or omitted. Accordingly, the Company
believes that although the disclosures are adequate to make the information
presented not misleading, these financial statements should be read in
conjunction with the financial statements and the notes to the financial
statements as of December 31, 1999, contained in the Company's Annual Report to
shareholders on Form 10-K as filed with the Securities and Exchange Commission.
The consolidated financial statements of the Company include the
accounts of the Company and its wholly-owned subsidiary, the Kamar Marketing
Group, Inc. All intercompany accounts and transactions have been eliminated in
consolidation.
(2) Inventories
-----------
Inventories consist of the following:
June 30, December 31,
2000 1999
---- ----
Raw materials $176,939 $136,909
Work-in-process 227,750 243,895
Finished goods 164,921 139,852
-------- --------
$569,610 $520,656
======== ========
(3) Debt Obligations
----------------
The Company has long term debt obligations, net of current maturities,
as follows:
June 30, December 31,
2000 1999
---- ----
8.62% Bank mortgage, collateralized
by first security interest in
building, due 1999 to 2003 $444,204 $453,349
Less current portion 19,617 18,691
-------- --------
Long term debt $424,587 $434,658
======== ========
The mortgage, which was entered into in May 1998, has a 15 year
amortization schedule with interest payable at the fixed rate of 8.62% per year
for the first five years. The Company intends to repay the then outstanding
principal at the end of this five year period, but the mortgage does provide the
option of resetting at a new fixed interest rate to be determined at that time
for one additional five year period. Principal payments under this mortgage
obligation, due in monthly installments subsequent to June 30, 2000, aggregate
approximately the following: $10,000 - 2000; $20,000 - 2001; $22,000 - 2002; and
$392,000 - 2003.
-8-
<PAGE>
IMMUCELL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(4) Net Profit per Common Share
---------------------------
The basic net profit per share of common stock is determined by
dividing the net profit by the weighted average number of shares of common stock
outstanding during the period. The diluted profit per share reflects the
potential dilution that would occur if existing stock options were exercised.
(5) Segment and Significant Customer Information
--------------------------------------------
The Company principally operates in the business segment described in
Note 1 to its Annual Report on Form 10-K for the year ended December 31, 1999.
The Company's primary customers for the majority (75% and 69% for the three
month periods ended June 30, 2000 and 1999, respectively, and 80% and 79% for
the six month periods ended June 30, 2000 and 1999, respectively) of its product
sales are in the United States dairy and beef industries. Sales to foreign
customers, who are principally in the dairy industry, aggregated 23% and 29% of
product sales for the three month periods ended June 30, 2000 and 1999,
respectively, and 18% and 20% of product sales for the six month periods ended
June 30, 2000 and 1999, respectively. Government grant income amounted to
approximately 1% ($21,000) and approximately 5% ($54,000) of total revenues in
the three month periods ended June 30, 2000 and 1999, respectively, and 1%
($32,000) and 4% ($91,000) of total revenues in the six month periods ended June
30, 2000 and 1999, respectively.
In 1998, the Company adopted Statement of Financial Accounting
Standards No. 131. The Company's two reportable segments are: (1) Animal Health
Products and (2) Research and Development ("R&D"). The accounting policies of
the segments are the same as those described in Note 2 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1999. The Company evaluates
the performance of its segments and allocates resources to them based on
contribution before allocation of corporate overhead charges. The table below
presents information about reported segments for the three and six month periods
ended June 30, 2000 and 1999:
<TABLE><CAPTION>
Three Months Ended June 30, 2000: Animal
(in thousands) Health
Products R&D Other Total
-------- --- ----- -----
<S> <C> <C> <C> <C>
Product Sales $ 1,396 -- $ 32 $ 1,428
Grant Income -- $ 21 -- 21
Royalty Income -- -- 10 10
------- ------- ------- -------
Total Revenues 1,396 21 42 1,459
Product Costs 708 -- 19 727
Research and Development Expenses -- 321 -- 321
Sales and Marketing Expenses 230 -- -- 230
Other Expenses -- -- 117 117
------- ------- ------- -------
Net Profit (Loss) $ 458 $ (300) $ (94) $ 64
======= ======= ======= =======
Three Months Ended June 30, 1999: Animal
(in thousands) Health
Products R&D Other Total
-------- --- ----- -----
Product Sales $ 976 -- $ 13 $ 989
Grant Income -- $ 54 -- 54
------- ------- ------- -------
Total Revenues 976 54 13 1,043
Product Costs 461 -- 6 467
Research and Development Expenses -- 185 -- 185
Sales and Marketing Expenses 196 -- -- 196
Other Expenses -- -- 116 116
------- ------- ------- -------
Net Profit (Loss) $ 319 $ (131) $ (109) $ 79
======= ======= ======= =======
</TABLE>
-9-
<PAGE>
IMMUCELL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE><CAPTION>
Six Months Ended June 30, 2000: Animal
(in thousands) Health
Products R&D Other Total
-------- --- ----- -----
<S> <C> <C> <C> <C>
Product Sales $ 2,803 -- $ 58 $ 2,861
Grant Income -- $ 32 -- 32
Royalty Income -- -- 13 13
------- ------- ------- -------
Total Revenues 2,803 32 71 2,906
Product Costs 1,373 -- 31 1,404
Research and Development Expenses -- 482 -- 482
Sales and Marketing Expenses 504 -- -- 504
Other Expenses -- -- 225 225
------- ------- ------- -------
Net Profit (Loss) $ 926 $ (450) $ (185) $ 291
======= ======= ======= =======
Six Months Ended June 30, 1999: Animal
(in thousands) Health
Products R&D Other Total
-------- --- ----- -----
Product Sales $ 2,327 -- $ 29 $ 2,356
Grant Income -- $ 91 -- 91
------- ------- ------- -------
Total Revenues 2,327 91 29 2,447
Product Costs 1,042 -- 10 1,052
Research and Development Expenses -- 418 -- 418
Sales and Marketing Expenses 425 -- -- 425
Other Expense -- -- 219 219
------- ------- ------- -------
Net Profit (Loss) $ 860 $ (327) $ (200) $ 333
======= ======= ======= =======
</TABLE>
(6) Recent Accounting Pronouncements
--------------------------------
In December 1999, the SEC issued Staff Accounting Bulletin No. 101
"SAB 101", "Revenue Recognition in Financial Statements". SAB 101 summarizes
certain of the SEC's views in applying generally accepted accounting principles
to revenue recognition in financial statements. The Company adopted SAB 101 in
the second quarter of 2000. Management does not expect the adoption of SAB 101
to have a material effect on the Company's financial condition or results of
operations.
On March 31, 2000, the Financial Accounting Standards Board (FASB)
issued Interpretation No. 44, Accounting for Certain Transactions involving
Stock Compensation - an interpretation of APB Opinion No. 25 (FIN 44), providing
new accounting rules for stock-based compensation under APB Opinion No. 25,
Accounting for Stock Issued to Employees (APB 25). FIN 44 clarifies the
application of APB Opinion No. 25 and, among other issues, clarifies the
following: the definition of an employee for purposes of applying APB Opinion
No. 25, the criteria for determining whether a plan qualifies as a
non-compensatory plan, the accounting consequences of various modifications to
the terms of previously fixed stock options or awards, and the accounting for
the exchange of stock compensation awards in a business combination. FIN 44 is
generally effective for transactions occurring after July 1, 2000, but applies
to repricings and some other transactions after December 15, 1998. The Company
does not expect the application of FIN 44 to have a material impact on the
Company's financial position or results of operations.
-10-
<PAGE>
IMMUCELL CORPORATION
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2000
Total revenues equalled $1,459,000 and $1,043,000 for the three month
periods ended June 30, 2000 and 1999, respectively. Total revenues equalled
$2,906,000 and $2,447,000 for the six month periods ended June 30, 2000 and
1999, respectively. Grant income in 2000 and 1999 was recognized under a
federally sponsored research grant in support of the Company's passive antibody
development programs. Royalty income was earned in 2000 under a license to an
Australian company covering the use of the Company's purification technology to
make whey protein isolate.
Product sales increased by $439,000 (44%) to $1,428,000 during the
three month period ended June 30, 2000, in comparison to the same period in the
prior year. Product sales increased by $505,000 (21%) during the six month
period ended June 30, 2000, in comparison to the same period in the prior year.
Product sales in the second quarter of 2000 were positively effected by the
shipping of FIRST DEFENSE(R) orders that had been backlogged as of March 31,
2000. Sales of FIRST DEFENSE and the KAMAR(R) HEATMOUNT(TM) DETECTOR increased
by 37% and 12% during the three and six month periods ended June 30, 2000 and
1999, respectively. Sales of FIRST DEFENSE and the KAMAR HEATMOUNT DETECTOR
aggregated 88% and 93% of total product sales during the three month periods
ended June 30, 2000 and 1999, respectively and aggregated 87% and 95% of total
product sales during the six month periods ended June 30, 2000 and 1999,
respectively. The decrease in the percentage of product sales that is comprised
of these two products is principally the result of the addition of sales of WIPE
OUT(TM) DAIRY WIPES to the product mix in 2000. The introduction of sales of
TIP-TEST(TM): JOHNE'S did not have a significant impact on the product mix in
2000 because those sales have been limited to date principally due to state
regulatory barriers that the Company is working to overcome. In July 1998, the
Company entered into a four year extension to the term of its product license
from Kamar, Inc. for the Kamar Heatmount Detector from December 31, 1999 through
December 31, 2003, subject to the right of either party to give 12 months'
notice of early termination.
Gross margin as a percentage of product sales was 49% and 53% during
the three month periods ended June 30, 2000 and 1999, respectively. Gross Margin
as a percentage of product sales was 51% and 55% during the six month periods
ended June 30, 2000 and 1999, respectively. The decreases resulted principally
from WIPE OUT having a lower gross margin than FIRST DEFENSE. The gross margin
increased by $180,000 (34%) and 153,000 (12%) during the three and six month
period ended June 30, 2000 and 1999, respectively.
Research and development expenses increased by $136,000 (73%) to
$321,000 during the three month period ended June 30, 2000, as compared to the
respective period in 1999. Research and development expenses aggregated 22% and
18% of total revenues during the three month periods ended June 30, 2000 and
1999, respectively. Research and development expenses exceeded grant income by
$300,000 (which amount equals 21% of product sales) and by $131,000 (which
amount equals 13% of product sales) during the three month periods ended June
30, 2000 and 1999, respectively. Research and development expenses increased by
$65,000 (15%) to $482,000 during the six month period ended June 30, 2000, as
compared to the respective period in 1999. Research and development expenses
aggregated 17% of total revenues during both the six month periods ended June
30, 2000 and 1999. Research and development expenses exceeded grant income by
$450,000 (which amount equals 16% of product sales) and by $327,000 (which
amount equals 14% of product sales) during the six month periods ended June 30,
2000 and 1999, respectively. Since 1999, internal resources have been invested
principally in the development of new animal health products that fit the
Company's objective of commercializing its proprietary technologies and helping
dairy and beef producers and their veterinarians manage disease and reproduction
in their herds. During the second quarter of 2000, the Company initiated a new
product development effort utilizing nisin (the same natural, antimicrobial
protein that is the active disease fighting agent in WIPE OUT) as a treatment
for mastitis in dairy cows. Additionally, funds have been invested in the
development of a product to detect infectious pathogens in water. Due to the
timing of certain research and development expenses that were incurred in the
second quarter of 2000, the amount invested net of grant income was higher than
the 12% to 14% of product sales that is anticipated over time.
-11-
<PAGE>
IMMUCELL CORPORATION
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Management believes that the expenses incurred resulting from the
investment in the research and development of new products is necessary to
foster growth for the Company in the future. Beginning in 1998, the Company
determined to increase development of new animal health products and to decrease
its internally funded research and development investment in products targeted
towards the human health care markets. Because funding requirements for these
animal health programs are less than the requirements for the human health
programs, the Company anticipates that it will be able to continue to report
profitable results of operations. The Company has made no provision for income
taxes because of the availability of sufficient net operating loss
carryforwards.
Sales and marketing expenses increased by $33,000 (17%) during the
three month period ended June 30, 2000 compared to the same period in 1999,
aggregating 16% of product sales in the 2000 period compared to 20% in 1999.
Sales and marketing expenses increased by $79,000 (19%) during the six month
period ended June 30, 2000 compared to the same period in 1999, aggregating 18%
of product sales in both of the six month periods ended June 30, 2000 and 1999.
General and administrative expenses increased by $29,000 (28%) and by $43,000
(20%) during the three and six month periods ended June 30, 2000 and 1999,
respectively, while the Company continues its efforts to control these expenses
while incurring all the necessary costs associated with being a publicly held
company.
LIQUIDITY AND CAPITAL RESOURCES
Total assets increased by approximately $411,000 to $4,267,000 at June
30, 2000 from $3,856,000 at December 31, 1999. Cash and cash equivalents
decreased by approximately $39,000 to $1,785,000 at June 30, 2000 from
$1,824,000 at December 31, 1999. Net working capital increased by $611,000 to
$2,831,000 at June 30, 2000 from $2,219,000 at December 31, 1999. Stockholders'
equity increased by $610,000 to $3,425,000 at June 30, 2000 from $2,815,000 at
December 31, 1999.
The Company was awarded a $710,000 Phase II Small Business Innovation
Research grant in September 1997. As of July 1, 2000, approximately $34,000 was
available under this grant to fund additional development expenses relating to
the DiffGAM clinical development program.
The Company believes that it has sufficient capital resources to meet
its working capital requirements and to finance its ongoing business operations
during the next twelve months.
FORWARD-LOOKING STATEMENTS
This Quarterly Report contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, and Section 21E of the
Securities Exchange Act of 1934. Such statements include, but are not limited
to, any statements relating to the Company's objectives concerning future
product sales and profitability and any other statements that are not historical
facts. Such statements involve risks and uncertainties, including, but not
limited to, those risks and uncertainties relating to difficulties or delays in
development, testing, regulatory approval, production and marketing of the
Company's products, competition within the Company's anticipated product
markets, the uncertainties associated with product development, and other risks
detailed from time to time in filings the Company makes with the Securities and
Exchange Commission, including its Annual Report on Form 10-K and its Quarterly
Reports on Form 10-Q. Such statements are based on management's current
expectations, but actual results may differ materially due to various factors,
including those risks and uncertainties mentioned or referred to in this
Quarterly Report.
-12-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders held on June
22, 2000, the stockholders voted on three business matters.
The first order of business was the election of the Board of
Directors for the next ensuing year. Each of the six nominees
recommended by management to the stockholders was elected to
the Board. The following list by name of director shows how
the votes were cast for each director:
Michael F. Brigham (for: 2,235,779; withhold:
19,114), Anthony B. Cashen (for: 2,235,572;
withhold: 19,321), John P. Donahoe (for: 2,234,703;
withhold: 20,190), Keith N. Haffer (for: 2,234,606;
withhold: 20,287), William H. Maxwell (for:
2,235,723; withhold: 19,170) and Mitchel Sayare
(for: 2,235,703; withhold: 19,190).
The second order of business was to consider and act
on the proposal to approve the Company's 2000 Stock Option and
Incentive Plan. Of the 795,087 shares that were voted on the
matter, 707,738 were voted in favor of the proposal, 69,609
were voted against the proposal and 17,740 abstained. There
were 1,459,806 broker non-votes.
The final order of business was to consider and act
on the proposal to approve the Company's 2000 Stock Option
Plan for Outside Directors. Of the 795,087 shares that were
voted on the matter, 685,281 were voted in favor of the
proposal, 94,274 were voted against the proposal and 15,532
abstained. There were 1,459,806 broker non-votes.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 Common Stock Purchase Warrant issued by the
Registrant to AMBI Inc. dated April 12, 2000.
10.1 2000 Stock Option and Incentive Plan of the
Registrant.
10.2 Form of Incentive Stock Option Agreement.
10.3 2000 Stock Option Plan for Outside Directors
of the Registrant.
10.4 Form of Stock Option Agreement.
27.1 Financial Data Schedule (for electronically
filed copies only).
(b) Reports on Form 8-K
None
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ImmuCell Corporation
--------------------
Registrant
Date: August 9, 2000 By: /s/ Michael F. Brigham
-------------------------------------
Michael F. Brigham
President and Chief Executive Officer
and Treasurer
-14-
<PAGE>
IMMUCELL CORPORATION
EXHIBIT INDEX
4.1 Common Stock Purchase Warrant issued by the Registrant to AMBI Inc.
dated April 12, 2000.
10.1 2000 Stock Option and Incentive Plan of the Registrant.
10.2 Form of Incentive Stock Option.
10.3 2000 Stock Option Plan for Outside Directors of the Registrant.
10.4 Form of Stock Option Agreement.
27.1 Financial Data Schedule (for electronically filed copies only).
